Minnesota's welfare reform proves a winner

It was nowhere near payday, and Lisa Halverson was down to $10 and a package of diapers. While she enjoyed working as a typist in Minneapolis, day-care expenses for her two preschoolers, at $160 a week, ate most of her $207 take-home pay. Halverson felt she had no choice but to go on welfare. "The hardest thing I ever had to do," she says, "was to tell my boss I couldn't afford to work anymore."

Not so fast, Lisa. Instead of paying her to stay home, welfare officials encouraged her to keep her low-paying job and offered to pay all but...